Procurement Process

www.final-yearproject.com | www.MBAThesis.
in
CHAPTER 1
INTRODUCTION
www.final-yearproject.com | www.MBAThesis.in
1.1)COMPANY PROFILE
India Food Company ltd is a Leading FMCG(biscuit manufacturing) company in

India in terms of retail sales and manufactures variety of biscuits. It is an integrated,
research based FMCG company, producing a wide range of quality, affordable and
tasty biscuits, trusted by healthcare professionals . The Company is driven by its
vision to provide variety of biscuits, with providing excellent quality and price by
using high, recent technology and skilled, motivated staff to gain our consumer trust
and loyalty participating to develop our society. With an extensive product range on
offer, strong balance sheet and consistent earnings performance the company has a
potential for a strong growth in future. With the mission of conducting business in a
constructive and ethical manner that is mutually profitable for customers, employees,
suppliers and the community. Our commitment to the values of quality, credibility,
cost effectiveness, and people are keys to our success.
1.2)COMPANY PRODUCT LINE

Food(Biscuits)-Feast Biscuits
A biscuit is an edible, and commonly flour-based product. The term is used to apply to
two distinctly different products in North America and the Commonwealth Nations.
The company provides a wide variety of biscuits under the brand name Feast
Biscuits.
1.3)PRODUCTS TYPE::
1.3.1)FEAST GLUCOSE BISCUITS:: For those light hunger pangs, a wholesome
& nutritious choice as these golden brown biscuits are made from the best quality
wheat.
Feast Glucose biscuits are ideal not just for kids but for adults too. A distinct category
of biscuit, unique to India, account for more than 45% of total production in the
country.No one knows for sure how this legendary name came to be established as a
common man's own food. But there is no disagreement regarding its role as a food for
the poor as well as the working class as it is the cheapest processed food ever made in
the world. The fact that this biscuit contains hardly 1% free glucose is beside the
point. Whether in free state or as a part of the starch in the wheat flour glucose from
the biscuit is readily available to the consumer within a few minutes of its
consumption and if the originators have called this product glucose biscuit, it must be
to create an impression in the minds of the consumers regarding its value as a source
of energy. At less than Rs 50 a kilo, glucose biscuit is indisputably the cheapest and
affordable convenient and nutritious food not only to a large segment of Indian
population, but also in whole of the world, with hardly any rivals in sight. The
growing popularity of small pack sizes, which was thought about a decade ago, has
made them an indispensable part of Indian landscape and there is no consumer
product has been left untouched by this unique 'phenomenon'. Who ever has thought
about this strategy ( definitely not a copy from the west ) deserves kudos for pepping
the market place and bringing millions of people into the main stream market. The
logic is simple and the presumption that lower income group can meet its aspirations
of consuming modern packed foods has proved to be right. It is unimaginable that
Indian consumer, whether in urban or rural area, can have access to a vast array of
foods and other personal hygiene products in the price bracket Re 1 to Rs 5. Glucose
biscuit is no exception.
1.3.2)FEAST CREAM BISCUITS A truly scrumptious range of cream biscuits that
have become an instant hit with children. ITCs chefs have put their legendary skills
into these biscuits to deliver truly tasty cream biscuits.
Bourbon
'Dream Cream' split cream variants are available in 'Choco-Vanilla' and
A special delight for flavours.
all those chocolate lovers.
'Strawberry-Vanilla'
Orange
Experience a tangy twist in biscuits with every Orange cream.
Cream
Butterscotch Cream
Another first, the taste of butterscotch ice-cream in cream biscuits.
1.3.3)FEAST FIBRE BISCUITS.

This ideal teatime biscuit is made from the finest quality wheat high in fibre and
keeps one light and healthy through the day .
1.3.4)FEAST MARIE LIGHT ORANGE

It has the distinction of being one of the most successful innovative Marie biscuits and
is liked by one and all.
1.4_)OBJECTIVE:
Primary Objective:
To Study & implement Procurement process along with batch management at IFC ltd into
SAP ECC6.0.
Secondary Objective:
To integrate the Down payment & Vendor invoice of finance at IFC ltd into SAP ECC6.0.
1.5) SCOPE OF PROJECT

SCOPE OF PROJECT
The scope of study includes:
-To understand various stages of procurement process that takes place in the
organization.
-Study and mapping of batch management.
-To create various policy for vendors.
-To study the concept of Down payment & Vendor invoice.
1.6)ORGANIZATION STRUCTURE
FIGURE1-HEADQUARTERS AND BRANCH OFFICES
FIGURE2-COMPLETE ORGANIZATIONAL STRUCTURE
ACMESPGV
sBaxrtoei
sPne.Mhc
tSacEnse
Mr.guxeSa
MaEetrp
anxricePI
naeMvuro
agcetuvhnd(s
geutisoa
ertviycd
Pvrei
Pean
Clst
u t s
t rn
ra
e nl ra
i)
gr re
rn x
ur cg u
e cr t
e rat
e rn t
t
c.
.
n
c
P
v
o
s
.
a
g
.
a
f
i
l i
t
n
s
FIGURE3-ORGANIZATIONAL STRUCTURE WITH DESIGNATIONS
1.7) JOB DESCRIPTION & JOB RESPONSIBILITIES

1.7.1) JOB TITLE: Assistant Manager Purchase
REPORTS TO: Manager
DEPARTEMENT: Materials Management
QUALIFICATIONS REQUIRED:UG - B.Tech/B.E. Food Technology, PG MBA/PGDM - Any Specialization.
SKILLS:Should have knowledge of Procurement
EXPERIENCE:5 - 7 Years in FMCG.
AREAS OF RESPONSIBILITIES:
Responsible to fulfil the requirement of production units on time.

Establishment and maintenance of good communication between the purchase and
other departments such as Production, Quality Control, inventory .
1.7.2 )JOB TITLE: Sr. Executive (Purchase)
REPORTS TO: ASSISTANT PURCHASE MANAGER
DEPARTEMENT: Materials
QUALIFICATIONS REQUIRED:
Graduate and MBA in Operations will be preferred.
SKILLS:
Knowledge of SAP will be preferred
Should have knowledge of Procurement
EXPERIENCE:
Candidate should have 3+ years of experience in Material Management.
8
Manages Purchasing Department in absence of Asst Purchase Manager .

Responsible for procurement of Raw Materials.
Establishment and maintenance of good communication between the purchase and other
departments such as Production, Quality Control, inventory.
Preservation of purchase documents.
1.7.3)JOB TITLE: Executive Purchase
REPORTS TO: Sr.Executive purchase
DEPARTEMENT: Materials Management
QUALIFICATIONS REQUIRED:
Bachelors Degree required, preferably in Food Technology.
SKILLS:
Knowledge of SAP will be preferred
Should have knowledge of Procurement
EXPERIENCE:
1-2 years experience in Materials Management, preferably in an industrial
Manufacturing environment.
Responsible for procurement of chemicals required..
Establishment and maintenance of good communication between the purchase and
other departments such as Production, Quality Control, inventory.
9
Preservation of purchase documents.
CHAPTER 2
AS-IS STUDY
10
DEFINITIONS:
MATERIALS MANAGEMENT
Materials Management is a process of management which coordinates, supervises and
executes the tasks associated with the flow of materials to through and out of an organization.
INVENTORY
Any available resource having economic value but kept idle is called inventory. Hence in a
manufacturing company, raw materials, work in progress materials and finished goods form
inventory.
Though WIP is not idle it still an inventory as long as it remains in company premises.
SERVICES
A service is an intangible, non-storable good, e.g. pest services by Godrej are performing a
service.
11
PURCHASE
Purchase means buying quality materials with reasonable price to sustain the production in
efficient manner.
TAXATION
The act of imposing taxes, as on the subjects of a state, by government, or on the members of
a corporation or company, by the proper authority for the raising of revenue.
DELIVERY TERMS
Delivery terms define the obligations and the responsibilities of the buyer and seller during
the delivery of goods.
PAYMENT TERMS
Conditions under a seller will make a sale. Typically, these terms specify the period allowed
to a buyer to pay off the amount, it may demand cash in advance, cash on delivery, credit
payment period of 30 days or more, etc.
PROCUREMENT
Procurement is an acquisition of goods or commodities by a company, organization,
institution, or a person. This simply means the purchase of goods from suppliers at the lowest
possible rate also maintaining the quality required.
Almost all purchasing decisions include factors such as delivery and handling, marginal
benefit, and price fluctuations. It is the acquisition of appropriate goods and/or services at the
best possible cost to meet the needs of the purchaser in terms of quality and quantity, time,
12
and location. Corporations and public bodies often define processes intended to promote fair
and open competition for their business while minimizing exposure to fraud and collusion.
FUNCTIONS OF PROCUREMENT DEPARTMENT:

The main functions of the procurement department are:
Receiving Purchase requisitions
Placing the order
Delivery at right time
Preservation of purchase records
Purchase budget
PROCUREMENT CYCLE:
Indent/ Requirement
Verify & Approvals
Information Gathering
Establishing suppliers contact
Background review
Negotiations
Purchase
Payments
13
Fulfillment
Maintenance & Renewal
Indent/ Requirement:
In IFC limited requirements for various materials come to the procurement department for
procuring the materials. The requirement comes through -Hard Copy. The purchasing is
centralized, all the requirement of items from various divisions comes to the purchasing
department and all the purchases are to be made by purchase department on behalf of all
other departments.
Following Purchase Requisition is used in IFC :
14
VERIFY & APPROVALS:

As the requirement arrives at the department, it is verified with the concern
department. Also the following things are verified:
-Repeat Order
-New requirement
After verifying, approval is taken from the head of the department.
15
Information Gathering:
The information in IFC limited is gathered through following ways:
Suppliers' Master Data
Industry Visit by Suppliers
Through Internet
Getting information from Higher Authority people
While identifying the Suppliers, following things are taken into consideration:
Past experience of the Supplier in execution of the proposed activity.
Past experience with the Supplier in previous deals with IFC.

Capability of the Supplier in execution of the proposed activity within the given time
frame.
Establishing Suppliers Contact:

When one or more suitable suppliers have been identified, RFQ is sent and they are asked for
quotation, or direct contact may be made with the suppliers.
Request for quotation (RFQ) are send to selected potential suppliers via
Telephone (verbally)
E mail (Written)
The previous suppliers data is maintained in database known as Suppliers Master data.
If the suppliers accept they will quote or send the information for the requirements.
Receipt of quotes:
If the supplier accepts the proposal, then the supplier will respond the buyer. The
Quotations submitted contains:
16
Price
Taxes Claimed
Freight, if any.
Terms of Execution / Performance
Terms of Payment
Any other details that may be specifically asked from the Supplier.
Evaluation of quotations at IFC:
Once all the quotations have been received, the same are analyzed with the
help of analysis sheet w.r.t. Rates, Terms of Execution, Terms of Payment, Past
Performance, and other factor that may be important for the purpose of
taking decision in selection of the Supplier.
Negotiations:
Negotiations are undertaken, and price, availability, and customization possibilities are
established. Delivery schedules are negotiated, and a contract to acquire the material is
completed.
Purchase Order:
A purchase order (PO) is a commercial document issued by a buyer to a seller, indicating
types, quantities, and agreed prices for products or services the seller will provide to the
buyer. Sending a PO to a supplier constitutes a legal offer to buy products or services.
Acceptance of a PO by a seller usually forms a one-off contract between the buyer and seller,
so no contract exists until the PO is accepted.
17
Material Receipt:
Goods receipt note is a document used to record the inward entry of the any goods
received at the premises of the organization. The document normally consists of the details
of Quantity Received, Quantity Rejected and Quantity Accepted, Supplier Name & P.O.
No. It is generated to ensure the receipt of goods at the warehouse and to complete the
18
invoice cycle. The report is generated for the materials, which are received in response to
the purchase orders, send to the Suppliers.
Once a Purchase Order has been completed the information sits in the system until the
goods is received. As the goods are received by the division, they enter the quantity
received of the material against that P.O. No. And thus the purchase department can look
forward to it. Once this has happened and you have an invoice it is time to complete a
GRN. The GRN has information relating to what has been received, how much and when.
On completion of the GRN a copy is sent to payment department, with the invoice, for
19
payment.
PAYMENTS:
Payment process steps are as follows:
1. The supplier will send the Invoice to the buyer.
20
2. The invoices send by the supplier can either match with the requirements or
not.
If the invoices do not match with the requirements, then it is send back to the supplier.
3. If it matches then, the procurement dept. sends the invoice and GRN to the
finance dept.
Invoice Verification:
It provides link between the purchasing & account payment process. Invoice verification
includes:
21
Entering invoices and credit memos received from vendors.

Checking the accuracy of invoice with respect to the content, prices and arithmetic.
Fulfilment:
Supplier preparation, expediting, shipment, delivery, and payment for the Product/Services are
completed, based on contract terms.
Maintenance & Renewal:

When the Product/Service has been consumed and/or disposed of, the contract expires, or the
product or service is to be re-ordered, company experience with the Product/Services is
reviewed. If the Product/Services are to be re-ordered, the company determines whether to
consider other suppliers or to continue with the same supplier.
OBJECTIVES AND POLICIES OF PURCHASE

2.1 Fundamental Principles of Buying
Rule: Fundamental principles of buying: Every authority delegated with the financial
powers of procuring goods in public interest shall have the responsibility and accountability
to bring efficiency, economy, and transparency in matters relating to procurement and for fair
and equitable treatment of suppliers and promotion of competition in procurement.
The procedure to be followed in making procurement must conform to the following
yardsticks:(i)
The specifications in terms of quality, type etc., as also quantity of goods to be

procured, should be clearly spelt out keeping in view the specific needs of the
procuring organizations.
22
(ii)
The specifications so worked out should meet the basic needs of the organization
without non-essential features, which may result in unwarranted expenditure. Care
should also be taken to avoid purchasing quantities in excess of requirement to avoid
inventory carrying costs.
(iii)
Offers should be invited following a fair, transparent and reasonable procedure.
(iv)
The procuring authority should be satisfied that the selected offer adequately meets
the requirement in all respects.
(v)
The procuring authority should satisfy itself that the price of the selected offer is
reasonable and consistent with the quality required.
(vi)
At each stage of procurement the concerned procuring authority must place on

record, in precise terms, the considerations which weighed with it while taking the
procurement decision.
(vii)
Contract made with any vendor should be according to the company policies and
discrepancies should not exist.
(viii)
Breaking any contract should be penalised accordingly.
(ix)
Compromises should not be made with the production of biscuits.
(x)
PURCHASE ORDER is release at different levels of management i.e. A1, and B1

according to the amount required for procurement. Up to Rs. 25000, release from A1
is required while for amount exceeding Rs. 25000 release from level B1 is required.
The different levels of management are as defined below:
23
A1 - Executive
B1 Manager
MANUFACTURING PROCESS:
MIXING:
This is a process where all ingredients are put together in right proportion for dough
formation. These ingredient are then fed into Mixers where mixing is done and dough is
prepared for moulding .Major ingredients are flour , fat ,sugar and others as per the product
one would like to have.
MOULDING:
In this section we laminate the dough into sheet which then passes down to gauge rollers and
sheet thickness achieved for cutting. Here we have a cutter or moulder as per the variety
where one gets the shapes and sizes of biscuits.
BAKING:
This is the area where we pass these moulded wet biscuit into baking oven .The biscuits are
baked on desired temperature. Various type of heating are available now days as per the
convenience and cost. Different type ovens are available.
COOLING:
24
These baked biscuits are then passed on to cooling conveyors for natural cooling prior to
packing. The temperatures are brought down to room temperatures.
PACKING:
These biscuit are then stacked and fed into packing machine for packing. Different packing
materials are available for packing of these biscuit in different packs, slug packs, pouch pack
or family packs etc. These packs are then put into secondary packaging like cartons to be
transported to the retailers.
25
26
QUALITY
IFC limited have one unit of manufacturing biscuits in Kolkata (West Bengal). The factory is
strategically located, so as to ensure a constant availability of raw materials and smooth
output & well connected distribution network. The factory has latest and most advanced
state-of-the-art machinery, bakeries, ovens & packaging facilities .
We are an ISO 9001:2000 certified company. We are also registered with Bureau of Indian
Standard for quality and standard.
All our products are manufactured under the most hygienic conditions. Great care is
exercised in the selection & quality control of raw materials, packaging materials & rigid
quality standards are ensured at every stage of the manufacturing process. Every batch of
biscuits are thoroughly checked by quality expert professional staff, using utmost modern
equipments.
27
28
BATCH MANAGEMENT:
IFC limited is one of the leading FMCG has its own food(biscuit) manufacturing plant in
Kolkata (WB). Production of various biscuits is done in batches. The plant captures all the
data related to what has been produced in each batch. This is done in hard copy form.
Batch includes batch start, hold, restart and complete, recipe , material consumption.
Purchase of some raw materials is also done in batches. However mainly batch handling is
predominantly used in production.
Definition:
The quantity or partial quantity of a certain material or product that has been produced
according to the same recipe & represents one homogenous unit with unique specification.
Structure:
The batch object contains the following key fields:
Material
Batch
Plant
Batch management will help in tracing and identifying the lot of a product uniquely.
Batch number can be created before production or during the production process i.e. at the
time of goods receipt.
Following are the essential information available in the batch:
Production date
Expiration date
Batch classification of the material
29
Batch management policy:

The group scheduling policy:
Processing parts in batches is preferable to the processing of parts in lots of size one when
setup times are significant. By batching parts that have similar manufacturing requirements,
the frequency of setups is reduced, which in turn reduces part lead times and provides greater
production capacity. Excessive batching can, however, result in performance deterioration.
Machine will process all the batches of a particular type that are currently in queue, before
switching to another part type.
30
AS-STUDY OF FINANCE PROCESSES IN IFC Ltd

INTRODUCTION:
DOWNPAYMENT:
Down payment is nothing but advance payment. Down payment made is when the company
makes advance payment to its vendors. Down payment received is when the company receive
any advance payment from its customers. Sometimes, you can make the payment in advance
(that means you have given amount before you receive the goods) and sometimes you will
receive the advance payment from customers (you will take amount before you sell the goods
and delivered to his premises).
Down Payment is a special G/L indicator. With the use of special g/l indicator we can specify
in the set-up what G/L account advances transactions be posted. Down payment means
advance paid to Vendor. These advances may be paid to Vendors for:
Purchase of goods from Vendor
Taking services from Vendor
Advance to Employees.
Payment to statutory Authorities.
Payment of security Deposit
Advance payment to employees as vendor, security deposit, statutory Authorities should be

routed through Vendor account.
Terms related to down payment:
31
General ledger: It is the main accounting record of a business which uses double-entry
bookkeeping. The general ledger holds all accounts for balance sheet and income (profit and
loss) statements.
The general ledger contains a number of sub ledgers:
Accounts Payable records all accounting transactions for dealings with
suppliers. Much of its data is obtained from procurement (Materials
Management).
Accounts Receivable records all accounting transactions for dealings with
customers. Much of its data is obtained from Sales and Distribution.
Asset Accounting records all accounting transactions relating to the
management of assets.
Bank ledger supports the posting of cash flows.
Reconciliation account: are G/L accounts that receive postings from a subsidiary ledger. i.e
transactions data are not posted directly to reconciliation account. It links ledger to its subledger.
Good receipt: GR is a goods movement with which the receipt of goods is posted.
A G/R leads to an increase in warehouse stock and also increases the GR/IR
clearing account.
Following types of goods receipt exist:

Goods receipt with reference to a PO
Goods receipt with reference to a production order
Other goods receipts
32
Goods issue: GI is a goods movement with which a material withdrawal or material issue, a
material consumption, or a shipment of goods to a customer.
A goods issue leads to a reduction in warehouse stock.
Following types of goods issue:

Material withdrawals for orders
Scrapping and material withdrawals for sampling
Return deliveries to Vendors.
Other internal staging of material
Deliveries to customers without using SD Shipping
Vendor Invoice
When materials department enters into an agreement to buy goods or request services from a
vendor or service provider by means of a Purchase Order, the vendor submits an invoice (or
bill) to the respective purchase department requesting payment. The invoice includes
information about the goods or services, such as date of delivery, quantity, and amount due.
33
The Vendor Invoice allows you to enter the bills you receive from your suppliers and
it matches them up to the quantities and costs entered on the Purchase Order. It will
also compare the Quantities received to the Quantities being billed. This will avoid
the uncomfortable situation of having to try to get more money from a customer after
they have been invoiced because you received a late invoice from your supplier.
34
CHAPTER 3
TO-BE STUDY
35
Step 1: Write SPRO(SAP reference project object) in Tab

Step 2: Go to enterprise structure. Create company. A screen will pop out as below.
Step 3: Enter :
company
company name
PO box
Postal code
City
country
Language key
Currency
Step 4: Save and exit.

Step 5: Go to logistics and create plant.
Step 6: Enter:
Plant code
Company name
Search term
Country
Region
36
Step 7: Go to materials management and create storage location, purchasing organization.
37
Step 8: Execute Transaction code OME4 to create purchasing groups.
Step 9: Go to Assignment in enterprise structure to assign everything which have been

created.
38
First assign company code to company in financial accounting.
Second assign plant to company code.
Third assign purchasing organization to company code.
39
PURCHASING AT IFC LTD

Step 1: Execute ME51 and create purchase requisition.
40
41
42
43
44
45
46
47
48
Step 2: Execute ME21 and raise purchase order (PO)
49
50
51
52
53
54
55
FINANCE TO-BE
DOWNPAYMENT PROCESS
FS00
56
57
58
59
60
61
FBKP
Select Down Payments, Current Assets
62
F-48
63
FK10N
64
VENDOR INVOICE
FB60
65
66
CHAPTER 4
GAP ANALYSIS
67
Following are the gaps which are identified in the project:
Integration of modules like financial management with materials management cannot

be done.
The centralization of warehouses could not be mapped due to the unavailability of a

warehouse management system.
68
CHAPTER 5
CONCLUSION
69
Procurement process defined for IFC LTD takes into account all the steps included in
purchase cycle & the documents used to manage the purchasing process. Also it includes the
processing of material in batches & vendor creation.The business process of IFC limited
which was studied is implemented in SAP R/3.
There are various benefits as an integrated solution such as SAP in an organization.

Commercial benefits would include having a single source for your financial information.
Capturing your business transactions in one location allows you to easily review inventory,
customer and vendor activity.
70
CHAPTER 6
BIBLIOGRAPHY
71
BOOKS
Martin Murray [2008] SAP MM Functionality & Technical configuration

Sap Press (Galileo), Edition 2006 page no. 243-301
SAP MM Black Book Dream Tech Publication, Edition 2010.
WEBSITES
http://help.sap.com/printdocu/core/print46c/en/data/pdf/MMPUR/MMPUR.pdf
accessed on 16.04.2011.
http://www.sap-img.com accessed on 6/04/2011

http://help.sap.com/saphelp_srm30/helpdata/en/38/4cc5376848616ae10000009b38f88
9/content.htm accessed on 23.03.2011
72

Procurement Process

Caricato da

Informazioni sul documento

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Procurement Process

Caricato da

Copyright:

Formati disponibili

www.final-yearproject.com | www.MBAThesis.

India Food Company ltd is a Leading FMCG(biscuit manufacturing) company in

1.2)COMPANY PRODUCT LINE

1.3.3)FEAST FIBRE BISCUITS.

1.3.4)FEAST MARIE LIGHT ORANGE

1.5) SCOPE OF PROJECT

FIGURE1-HEADQUARTERS AND BRANCH OFFICES

FIGURE2-COMPLETE ORGANIZATIONAL STRUCTURE

1.7) JOB DESCRIPTION & JOB RESPONSIBILITIES

REPORTS TO: Manager

DEPARTEMENT: Materials Management

QUALIFICATIONS REQUIRED:UG - B.Tech/B.E. Food Technology, PG MBA/PGDM - Any Specialization.

SKILLS:Should have knowledge of Procurement

EXPERIENCE:5 - 7 Years in FMCG.

Responsible to fulfil the requirement of production units on time.

1.7.2 )JOB TITLE: Sr. Executive (Purchase)

REPORTS TO: ASSISTANT PURCHASE MANAGER

Manages Purchasing Department in absence of Asst Purchase Manager .

1.7.3)JOB TITLE: Executive Purchase

REPORTS TO: Sr.Executive purchase

DEPARTEMENT: Materials Management

Preservation of purchase documents.

FUNCTIONS OF PROCUREMENT DEPARTMENT:

Verify & Approvals

Establishing suppliers contact

Maintenance & Renewal

VERIFY & APPROVALS:

Past experience of the Supplier in execution of the proposed activity.

Past experience with the Supplier in previous deals with IFC.

Establishing Suppliers Contact:

Entering invoices and credit memos received from vendors.

Maintenance & Renewal:

OBJECTIVES AND POLICIES OF PURCHASE

The specifications in terms of quality, type etc., as also quantity of goods to be

Offers should be invited following a fair, transparent and reasonable procedure.

At each stage of procurement the concerned procuring authority must place on

Breaking any contract should be penalised accordingly.

Compromises should not be made with the production of biscuits.

PURCHASE ORDER is release at different levels of management i.e. A1, and B1

Batch classification of the material

Batch management policy:

AS-STUDY OF FINANCE PROCESSES IN IFC Ltd

Purchase of goods from Vendor

Taking services from Vendor

Payment to statutory Authorities.

Payment of security Deposit

Advance payment to employees as vendor, security deposit, statutory Authorities should be

Following types of goods receipt exist:

A goods issue leads to a reduction in warehouse stock.

Following types of goods issue:

Step 1: Write SPRO(SAP reference project object) in Tab

Step 4: Save and exit.

Step 7: Go to materials management and create storage location, purchasing organization.

Step 8: Execute Transaction code OME4 to create purchasing groups.

Step 9: Go to Assignment in enterprise structure to assign everything which have been

First assign company code to company in financial accounting.

Second assign plant to company code.

Third assign purchasing organization to company code.

PURCHASING AT IFC LTD

Step 2: Execute ME21 and raise purchase order (PO)

Select Down Payments, Current Assets

Following are the gaps which are identified in the project:

Integration of modules like financial management with materials management cannot

The centralization of warehouses could not be mapped due to the unavailability of a